Oil prices slide amid slower growth worries
NEW YORK—Oil prices slipped Tuesday as traders fretted about slower growth in big oil importers and mulled the impact of the death of Al-Qaeda chief Osama bin Laden on global political risk in the market.
West Texas Intermediate crude for May delivery lost $2.47 to $111.05 a barrel in New York trade, after nearing the $115 mark during Tuesday.
Earlier in London the benchmark Brent North Sea crude for May fell $2.67 to $122.45.
“There is still some follow-through from Osama bin Laden’s ending,” said Adam Sieminski at Deutsche Bank.
“Many traders believe it will remove some of the geopolitical risk from the market.”
However, he added, “it is hard to see how that really is the case.”
Prices had fluctuated wildly on Monday following weekend news of bin Laden’s demise.
Tom Bentz of BNP Paribas said that sellers had simply taken over after a steady runup in prices.
“The market has just been overvalued,” he said.
But there was also more signs that slower economic growth in big crude importers like China and the United States could dampen demand.
“People are worried about growth in the US economy as well as in China,” said Andy Lipow of Lipow Oil Associates.
“The market is worried about higher fuel prices translating into less money for the consumer, and consequently less spending and slower growth.”
Investors also monitored political unrest in the oil-producing Arab world and its impact on crude supplies.
The Libyan rebels controlling the east of the country said Tuesday they had no plans to resume significant oil exports.
“I’m waiting for an assessment on all of the oil installations (in rebel-held territory),” said Ali Tarhoni, who holds the economy and oil portfolio in the rebel administration.
“The top priority is to protect the installations, not to produce,” he told reporters in the rebel capital Benghazi.
Libya, a key crude-exporting nation that was producing some 1.7 million barrels a day before an uprising against strongman Moammar Gadhafi broke out in mid-February, has seen its output slashed since the revolt began.
